The crypto industry remains one that entitles continuous criticism from regulators and lawmakers due to its volatile nature. Its nascent tendency has also led to multiple manipulations and alleged digital asset scams, and in 2022, the trend hasn’t buckled on that forefront.
Now, according to Rostin Behnam, CFTC Chairman, the number of cases with respect to digital asset fraud and alleged market manipulation has continued to accelerate in the industry.
Speaking at a crypto conference in New York via video, Behnam mentioned,
“Headlines about the loss of tens of millions of dollars in digital assets due to protocol exploits, phishing attacks, preying on vulnerable people, and other fraudulent and manipulative schemes have become far too common.”
Additionally, he added that recent worldwide turmoil between countries has highlighted crypto’s ability to destabilize the broader American economy, affecting the public and their way of life.
For example, Behnam stated that the derivatives markets regulator had filed for more than 50 enforcement actions since 2015, and more than half of those case files involved some form of digital asset fraud. Another 23 cases have been open since the last fiscal year, and the CFTC chairman cited that the two enforcement case that totaled $140 million in penalty in October 2021, was only the ‘tip of the iceberg’.
The CFTC Chairman has a point
While any statement from a U.S government official on crypto should be taken with a grain of salt, the CFTC chairman was not crossing any lines when identifying these anomalies. His comments come right after last week’s major mess created by TerraUSD and its sister asset LUNA. In addition to that, losses in DeFi protocols have also reached new heights in 2022.
As reported earlier, In Q1 2022, over $1.6 billion have already been stolen from crypto users. The said figure is single-handedly more than the total amount stolen in 2020 and 2021 combined. Another fraud was observed as recently as 16th May, when an attack on the Fegtoken ecosystem led to losses worth over $3 million.
The CFTC Chairman continued to rally toward better regulations for the crypto industry at the conference. He said,
“I also call on everyone here today to continue to advocate and support regulatory obligations that will make these markets more transparent, safer, and resilient,” he said. “I’ve said many times, the crypto markets present unique characteristics that would benefit from the federal market oversight.”